FIRST-TIME home buyers were given a leg up on the property ladder yesterday with the expansion of a grant designed to help financially struggling home hunters.
Another 2,700 first-timers will qualify for the additional CPF housing grant every year, due to changes announced by Finance Minister Tharman Shanmugaratnam.
In a rare move, the Government has lifted the income ceiling for first-time home buyers qualifying for the additional grant - from $4,000 a month previously to $5,000 now.
At the same time, the grant’s maximum amount has been raised from $30,000 to $40,000.
This comes about 18 months after the additional housing grant was raised from $20,000 to $30,000 in August 2007.
Then, the eligibility criterion was also lifted to $4,000 from $3,000.
Mr Tharman said the total number of households benefiting from HDB’s additional housing grant scheme will now be boosted to 8,000 annually.
The enhanced scheme, which aims to ensure that public housing remains affordable to first-timers, will double theestimated cost of the scheme to about $150 million per year, he said.
Market watchers observed that the additional housing grant - typically aimed at the low-income group - is now being extended to the lower middle-income group.
PropNex chief executive Mohamed Ismail said this departure was a ‘positive move’ as HDB prices have risen about 30 per cent in the last two years.
‘With prices going up, monthly mortgages are also rising. In this difficult time, the grants will really help first-timers who want to buy a home, and start a family,’ said Mr Ismail.
Mr Samuel Ng, 43, head of the Marine Parade Family Service Centre, said the latest HDB initiative will address some newlyweds’ concerns during this crisis.
In particular, the move seems to address the ’sandwich class’ or what he calls, the ‘middle poor’.
‘For the really low-income, there is already a support network in place for them. But the low- to mid-income families often find themselves squeezed, and find that there are fewer social initiatives that cater to them.’
Housing, Mr Ng pointed out, is crucial to starting a family. This is one of the priorities for the Government.
Mr Tharman said yesterday that the Government will spend $1.6 billion this year - and the same in each of the next three years - to support marriage and parenthood.
These include initiatives such as government-paid maternity leave, infant-care and childcare subsidies.
Ms Y.L. Huang, a 25-year-old teacher, welcomed the news as her income combined with her fiance’s exceeds the $4,000 mark for the housing grant.
‘Knowing we now qualify for a bigger housing grant makes buying a new home a bit easier,’ she said.
Source: Straits Times - 23 Jan 2009